Nick Scott offers some thoughts on risk governance when using WhatsApp for work communications.
Businesses large and small are increasingly using WhatsApp messages as a way of running their businesses, including negotiating and entering into contracts. Indeed, many of your clients very likely use it in that way. Professional advisors are also increasingly using WhatsApp because their clients expect it and it often works really well. For example, speaking to a client who is abroad on WhatsApp is simplicity itself compared with the alternatives. There are, however, a misconception that the typical informality of WhatsApp messaging means that relevant exchanges of WhatsApp messages cannot or do not lead to concluded contracts. Another is that that advice given over WhatsApp might be somehow less binding than if sent in a more considered format, for example by email or letter.
This article is therefore going to explore two areas:
(i) Whether exchanges of WhatsApp messages can create contracts;
(ii) Some of the specific risks of advising by WhatsApp; and how you might look to minimise the risks of using WhatsApp.
WhatsApp and binding contracts
It is now pretty well settled in the caselaw that, subject to what the messages actually say, WhatsApp messages can (and frequently do) give rise to binding contracts.
Broadly, if the WhatsApp messages record an offer to do something in return for payment, and this is accepted by a WhatsApp message, then a contract will arise. The court will use common law and statute law to fill any contractual gaps.
Legally binding or not?
So, it is entirely possible that relevant WhatsApp exchanges give rise to a contract, but equally possible that they do not.
Alternatively, they may give rise to a contract, but one which doesn’t, for example, cover to your satisfaction what happens in the situation envisaged.
That’s a pretty unsatisfactory and risky outcome. Although you might use WhatsApp for commercial negotiations (e.g. for a fee estimate), as that is what your clients and suppliers use, having a formal agreement in place is much the better option – it reduces the risk of finding yourself debating what was agreed after a dispute has arisen.
Granted, there are plenty of disputes about what express written agreements require the parties involved to do, so they aren’t a panacea; but they do tend to offer greater scope for consideration, at the outset, of risk allocation. It would be very surprising if the WhatsApp messages in the sort of scenario envisaged even discussed payment terms, let alone covered what relevant limitations and/or exclusions of liability there might be. A proper written agreement entered into after the WhatsApp exchanges could, realistically, cover that territory much more easily than an exchange of text messages.
Are the risks worth it?
The relevant caselaw illustrates the significant risks associated with using messaging platforms such as WhatsApp for business communications. Not only is there the potential for unintentionally forming binding contracts, but also for ambiguity around key contractual matters (such as pricing, timelines and payments). Recent cases reiterate that the courts will be prepared to apply the common law and statute law to imply terms into the contract to fill in the gaps, which is what you would expect, as the approach of English courts is, broadly, to uphold contracts and keep the parties to their bargain. That said, the implication of terms can easily lead to less- than-optimal commercial results, hence why so much time and effort is typically expended on the agreement of express contractual terms.
Advising by WhatsApp
As professional advisers we are all familiar with the importance of taking proper attendance notes of meetings and calls. They are meant to be a clear record of what was discussed, factually, and what was advised, as a legal matter. Depending on your working style, you may even circulate your attendance notes to the relevant client, as both adviser and client then know what advice has been given and how the matter is to be moved forward.
Imagine then, that you send your client some significant advice and it is deleted by your client, in such a way that neither you nor the client can access it.
Believe it or not, WhatsApp allows one party to the conversation to do exactly that and delete a message for everybody. All of a sudden, having advised over WhatsApp (because that was how the client wanted to communicate) you could find yourself at the mercy of an unscrupulous client and scrambling to prove that you gave not just the correct advice but, in fact, any advice. Not a good day at the office.
So, WhatsApp, despite its many attractions for delivering responsive client service, has a lot of risk baked into it, as far as advisory professionals are concerned.
Even though your firm’s PI cover is pretty likely to extend to the use of WhatsApp as part of your service delivery, WhatsApp, as a medium, isn’t really suited to the nuances of detailed, complex advisory work. Much better that you send your clients a considered email and then a WhatsApp to say: “I sent you an email at x o’clock setting out the advice you asked for. Please review and come back to me with any questions.”
In that way, the clients (rightly) feel they are getting an attentive personal service, you are much more likely to be discharging your obligations to advise to the appropriate standard, and, crucially, managing your risks of so doing. A further point to consider is whether your engagement letter needs amending to cover off the use of WhatsApp, in the way that many engagement letters deal with email being subject to relevant cyber risks.
Used well, WhatsApp is a great addition to email/other formal written correspondence, and it does often allow you to cultivate a friendlier, more open dialogue with your clients. That’s great, up to a point, but just take care to reflect on how you’re using WhatsApp and that this fits in with proper risk governance.
Minimise your risk
With all the above said, it’s unrealistic to think that your clients will stop using WhatsApp during their communications with you, because it is a really effective means of communicating. Moreover, you don’t want to cut yourself off from WhatsApp’s many plus points, by being overly concerned about the potential risks identified in this article. It’s just a question of how you adequately manage those risks. Try to do the following if you use WhatsApp in your businesses:
- Train staff on how to navigate the use of WhatsApp when conducting business communications and the dangers of, for example, committing the business to unfavourable contractual terms.
- Make it clear to clients at the outset that any fee estimates given over WhatsApp, for convenience, will have to be formalised in writing and signed by all parties.
- Don’t use WhatsApp to deliver complex advice that warrants more a formal communication method, but do think about using it to signpost clients to that advice.
- Nick Scott is a Partner at Keystone Law